Sunday, May 04, 2014

STATE VERSUS MARKETS?

“No country in recorded history has grown as fast – and moved as many people out of poverty – as China over the last thirty years. A hallmark of China’s success has been its leaders’ willingness to revise the country’s economic model when and as needed, despite opposition from powerful vested interests. And now, as China implements another series of fundamental reforms, such interests are already lining up to resist. Can the reformers triumph again?

In answering that question, the crucial point to bear in mind is that, as in the past, the current round of reforms will restructure not only the economy, but also the vested interests that will shape future reforms (and even determine whether they are possible). And today, while high-profile initiatives – for example, the government’s widening anti-corruption campaign – receive much attention, the deeper issue that China faces concerns the appropriate roles of the state and the market.”

Comments

Stiglitz confronts the dominant political issue that produces contrary remedial policies from adherents of the idealogical “solutions” to the question he asks about “the deeper issue” facing China” (and every other country too) of: “the appropriate roles of the state and the market.”

China’s “deep” question is not unique. The same question dominates all countries that exist, or could exist anywhere since Homo sapiens walked upright out of the African bush.

The division of labour was not invented in a ‘pin factory’; it appeared long ago with early humans because of wide variations in human abilities, some were good at tracking sources of food, especially sources of meat, other weren’t as good; some were better at knapping stone tools or sharpening woodern weapons to secure food (and kill competitors and other predators); others good at making fires and finding and securing night-time sleeping places; and so on across the skill-sets that separated small groups living on nature that was necessary for survival. Some, albeit, minimal co-operation within the separate groups trumped short-sighted, individual tendencies to selfishness.

It was ever thus. And still is, albeit on a larger scale with our higher technologies.

Today, the first few thousand of the human species has now become 7-billion strong and counting. The false question is not whether we rely solely on state or market provision; we are bound to have both. Indeed, it is hard to imagine doing without one or the other. Of course, we can have too much of one and too little of the other. But a stateless market system (a Hard Libertarian fantasy) or an absolute abence of markets (a tried and absolutely failed socialist utopia) are not realistically ever going to be on the human Agenda.

The only real argument is going to be about the appropriate balance of both markets and states, because human societies need both and, I would venture to suggest in our high-tech complex societies, they cannot subsist for long with all of one (total state provision, say) and no markets, or vice versa, except in the fantasies of those who are not paying attention either to the present arrangements or to written history, plus so-called ‘pre-history’.

The latter is ‘written’ in the remnants of humans in the past that passed away where we find their archeological and skeletal remains “written” amidst their detritus (See: Cyptian Broodbank. 2013. “The Making of the Middle Sea; a history of the Mediterranean from the Beginning to the Emergence of the Classical World”: Thames and Hudson).